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TIPS&Treasury spreads Fido,VG,SellDirect
Old 01-27-2006, 09:22 AM   #1
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TIPS&Treasury spreads Fido,VG,SellDirect

I've noticed that the spreads for trading TIPS are tighter at Vanguard than at my broker. Has anyone noticed how tight spreads are for TIPS (or other treasuries) at Fidelity?
Both allow buying commission free at auction, but I'm thinking about selling before maturity, and don't want to get taken on the spread.

In taxable accounts, another possibility is treasury direct. They have an option called Sell Direct, but it isn't clear to me how good the pricing is. Any experience or knowledge of that?

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Re: TIPS&Treasury spreads Fido,VG,SellDirect
Old 01-27-2006, 10:07 AM   #2
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Join Date: Dec 2005
Posts: 137
Re: TIPS&Treasury spreads Fido,VG,SellDirect

I just sold a multi six figure 6 mo. T-Bill using SellDirect. The process is they charge $45 for doing it, and they submit the sell to three authorized treasury brokers and take the highest offer. As such, they do their best (they state) to get you the best price. I got a call from the Treasury to confirm that I wanted to sell.

I was pretty nervous about it. This was a lot of money, and I had no way of knowing the sell price, and had no recourse if I didn't like the price. But within the week I got the money, and I'm happy with the sale. I haven't seen the detailed math (they send you a breakdown of the sale), but as far as I can tell I received the original, the earned interest for the holding period (I kept it about 47 days), minus the capital gain loss due to 6 mo rates rising, minus the $45, there about. Any spread loss appears to have been lost in the noise.
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